Tuesday , August 21 2018

Resignation, release & bank loan

I am an engineering graduate and have been working with a company since July 1, 2006. I had been hired locally as an engineer. I have submitted my resignation on Nov 21, 2017 requesting my last working day as Feb 21, 2018 (3 months notice period) , as per Kuwaiti labor law. I had sent the resignation letter by email to the GM and submitted a hard copy to the DGM of the company.

Till date I have not received any approval or a signed copy confirming my last day with the company. Although I had a meeting with the GM and he verbally approved my resignation.

Please advise, since I submitted my resignation and I have email read receipts of the same. Can I stop coming to work from Feb 22, 2018 or join a new employer, without any legal implications?

How do I get my transfer papers and my indemnity cleared from my current employer. The current employer is also demanding me to submit my passport with them. Please advise if it is legal to do so?

In addition I would also like to add that the company is going through difficult times and many of the partnering entities (Vendors & Suppliers) have made it evident to stop any further cooperation with them.

My current salary is basic KD 850 plus car allowance KD 50. Please help me to calculate my indemnity for the above said period ie from July 1, 2006 to Feb 21, 2018. Since the company is facing financial issues I have heard that they are paying the indemnity in installments. I also have two bank loans amounting to around KD 8,000. As you know once I leave the job, my salary will no longer be credited to the bank. Will I face a travel ban in the event that the company does not clear my indemnity in one shot, which in turn should be redirected to close the loan? I have no other means of repaying this loan. I had acquired this loan based on a salary continuation certificate issued by the company. Is it possible to transfer the loan on to the company’s name?

I have some good offers from employers in other countries, will I be able to move out of Kuwait unless I clear the loan? Kindly advise at the earliest.

Name withheld

Answer: If by the effective date of your resignation is due and there is no positive development on the part of the company, then we advise that you file a case with the Ministry of Social Affairs and Labour through the Labour Department in your area and they will compel the company to grant you the release or they will unilaterally grant you the release. Until this is done you will be breaking the law if you stop going to work or join another company without a release.

In the event of acquiring a release, your indemnity will be worked out as follows: Total salary (KD 850 + KD 50) = KD 900; Service 11.5 years. For the first five years you get 15 days pay for each year = 75 days. But these 75 days have to be divided by 26 (working days in a month) = 2.88 months salary. For the remaining 6.5 years service you get one month salary for each year = 6.5 months salary. Total = 6.5 + 2.88 = 9.38 months salary = 9.38 X KD 900 = KD 8,442.

As you have completed over 10 years of service, you will get the above amount regardless whether you resign or your services are terminated. With regard to your bank loan, we advise that you meet your bankers and put the issues before them and hopefully a workable solution could be found to the satisfaction of both parties. As for taking a job outside Kuwait without settling your bank loan we advise that you don’t entertain that idea since you will be breaching the loan agreement entered with the bank and will face the necessary consequences regardless of where you are.

 

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